Launching and growing a Startup R&D unit Case Study
Problem: A SE Asian bio-pharma company that sold white labeled products wanted to start indigenous research facility. They also wanted to improve product quality and logistics as most of their products had customer complaints.
Due Diligence: Due diligence of their product mix, complaints, new product portfolio was done. Value stream maps for all existing products were set up. A site for the start-up R&D was identified.
Solution: Design Thinking and Hoshin were installed to create R&D infrastructure and build capabilities to meet company’s goals.
Business processes dealing with recruitment, employee engagement, material/ machine procurement, compliance and general QMS, IPM, regulatory, product development, distribution and logistics were re-engineered. Kaizen was installed across the organization to maintain culture of quality and continuous improvement.
International marketing business processes were also set up enroute as the company added ‘exports to Netherlands, CIS, GCC and ASEAN countries’ to its corporate goals. Hence, course-correction was done appropriately, successfully.
Customer-centric approach comprises of sequential and collaborative efforts at understanding the voice of the customer (VoC).
There is only one valid definition of a business purpose: to create a customer
Following 8 steps facilitate to become a Customer- Centric organization-
- Define your target customers.
- Learn how customers feel and perceive your company.
- Align technology, process, products and services to customer needs.
- Map and improve customer journey.
- Engage leadership and staff in the customer mapping activity.
- Transform your organizational culture and reward systems.
- Measure your performance using customer centric KPIs.
- Incorporate customer feedback into process and product (or services) innovation and design.
Organizations, right at the outset, need to have complete clarity about the path they wish to take regarding innovation.
Remember “Innovation is a full-time job”. It simply can’t be done on a part-time basis. Also, skills needed for ‘Innovation’ are different from those required to run a core business or even for that matter a company’s existing product development department. Hence, if your manager has dual responsibilities of running your development lab and building innovation, means this is a sure sign of a failure! For path- breaking innovations to be a reality, you need to have an ‘Innovation’ leader with a dedicated taskforce and allotted finances.
Another significant element of succeeding with Innovation is effective handling of “Innovation killers”.
Here are some of the ‘innovation killers’ I've observed, that dramatically reduce return on investment (ROI) on innovation. Read on and checkout if your organization hosts any of them-
'We welcome all new ideas' - This is one of the suicidal innovation approaches. Leadership should clearly inform ‘what not to do’ as once constraints or boundaries are placed, the team knows what innovations to focus on i.e. innovations are more strategic and happen not ‘by chance’.
"What is the NPV?" - Asking for a NPV information or for that matter any financial metric at the time of onset of the innovation project is again self-immolation. Instead the acceptance could be based on customer needs, trends etc.
"We are confident since we have lot of quantifiable industry data" - Industry reports are great to understand market landscape but customer needs have to be understood and documented only after spending quality time in the market to conduct the market research that helps to identify the unmet customer needs and key business model levers.
"Our brand and technology are better'- Instead ask ‘What is the unmet customer problem?” Secondly, do your brand and technology allow you to satisfy your customer’s problem better? If the answer is not an unequivocal yes, then go back to the drawing board.
"This will never work" - Typically teams in most organizations teams can be split into four main categories:
Innovation enthusiast: these are people who dislike maintaining status quo. They always like to take risks and seek new heights.
2C Profile-ist: This comprises majority people who are comfortable with status quo. However, with coaching and convincing (2C) will tend to be supportive and accept moderate changes.
Followers: This group doesn’t have any specific opinion. They simply tend to follow the majority route per se.
Nay sayers: These people constantly pose discouraging comments and excuses at every instant a new idea is presented. In an economic era where continuous improvement and innovation are lifeline for businesses, such ‘Nay sayers’ might turn out to be more dreadful than an under-performer.
Below are some methods I've successfully employed to effectively handle Innovation killers–
- Demonstrate the damage they cause.
- Stop excuses and limit destructive criticism.
- Work hard to build an organizational culture that supports innovation.
- Get buy-in and ownership from business unit managers.
- Always have a widely understood systems-wide business process.
- Tie ‘Innovation’ to ‘Company strategy’.
- Spend enough resources on training and coaching Innovation teams.
- Create an ‘Idea management system’: if necessary, use external experts to evaluate ‘Innovative concepts’ before allotting dollars. Set effective idea acceptance criteria and metrics in advance.
You can no longer expect to lead the pack in your industry simply with incremental continuous improvement efforts. Instead, you need to raise the bar and develop a business process that draws’ Continuous rapid innovation’.
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- Process innovation.
- Product innovation.
Process innovation deals with internal operations such as- efficiency improvement, productivity increase, data management etc.
Product (or services) innovation deals with creating new products or services, to bring- in new revenue streams, develop products (or services) that add value to current initiatives, make customer experience more satisfying etc.
However, ‘Innovation’ is not an initiative. It’s a business process. The ‘Innovation’ process begins with market selection. It includes customer mapping, steps to uncover customer needs, analyze unmet needs, design or select a growth strategy and generate product (or service) concepts. Approved concepts then enter the 'Development' phase- a separate process.
If the ‘Innovation’ process were executed effectively, only winning products would enter the ‘Development’ process consequently, innovation success rates would rise substantially. This is especially because when ideas are generated around specific unmet customer needs, the chances of devising a solution of great customer value increases dramatically.
More so, knowing where to focus creatively changes the dynamics of idea generation. If you’re an organization that doesn’t wish to thrive on chaos, rather grow strategically, then Continuous Innovation is the way to go !
#ContinuousImprovement #Kaizen #Innovation #InnovationInitiative #StrategicInnovation
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Customer- centric innovation begins with a customer- centric approach and includes-
- Customer insight.
- Customer focus.
- Customer solutions.
- Customer management.
- Customer process.
- Customer contact.
- Customer loyalty.
The key here is that- companies must identify the first task a customer must do to initiate purchase of its product and effectively map the entire process of the customer’s journey to its product (or services).
Next in sequence is to focus on various customer touch points such as- offices, stores, billing or invoicing, phone, emails, media, marketing, events, internet, social media sites, sales staff interactions, social groups, word of mouth etc.
A customer may state in general terms- better, quicker, dependable. Customer-centric innovation calls for deeper understanding of the customer’s needs, to delve into a wider scope of that need, evaluate the unmet need and design your product (or services) accordingly.
For example, a customer states- 'he wants to buy insurance'. For a customer-centric innovator company, this statement means- the customer is actually not “buying insurance” rather “obtaining protection”. The wider scope of “obtaining protection” ignites more ideas for the insurance company to build more service solutions and features into their products, than “buying insurance” might have brought to light, see what I mean?
Here are 5 attributes to successfully attain customer-centric innovation:
- Customer delight: Engage with customer from Get Go.
- Listen to the customer: Bring forth customer commitment top down. Inculcate and nurture customer centric workplace culture. Recognize the customer across all levels of the business.
- Find unmet customer need: Design policies and business processes from customer’s point of view. Measure what matters to customers.
- Think inside the box: Scattered brainstorming doesn’t work. Both Research as well as Development has to be strategic.
- Create products and services as per customer demands. i.e. Design and Develop products based on the unmet customer need.
Lastly but not the least, encourage customer feedback. Change customer satisfaction to a state of customer delight. This alone shall differentiate your product (or service) from being "one among many" to your customer’s "preferred choice"
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